(MENAFN- AFP) Procter & Gamble on Friday announced plans to unload its Duracell battery business as it reported a big drop in earnings following a large asset write-down.
P&G, which makes Pantene shampoo, Tide detergent and other household staples, reported quarterly earnings of $20.1 billion, down 34.2 percent from last year on slightly lower sales. The results covered P&G's first quarter in fiscal year 2015.
The biggest factor behind the lower earnings was a $932 million one-time charge to write down the value of its Duracell battery business, which P&G said it will hive off or sell.
P&G garners $2 billion in annual sales from Duracell, said chief financial officer Jon Moeller, who described the enterprise as "very profitable." P&G has a 25 percent market share in the global battery business.
Although Duracell is "very profitable," P&G wants to focus on "even more attractive opportunities" in its portfolio, Moeller told reporters on a conference call.
P&G in August announced plans to cull 90-100 brands in order to better focus on its best prospects.
P&G said its "current preference" was to split batteries into a standalone company, perhaps in a spinoff to shareholders. But P&G said it had not reached a final decision on the exact plan and that a divestiture was also possible.
P&G chief executive A.G. Lafley described the company's earnings more broadly as "in line with our expectations, despite a very difficult operating environment."
P&G reported higher sales for its health care products (+6.0 percent) as well as its baby, feminine and family care segment (+1.0 percent).
But sales dropped in its other three divisions, in part due to the strong dollar.
Sales in all five divisions were flat or positive compared with last year, when currency effects and the impact of acquisitions and divestitures are removed.
P&G said it expects "significant negative sales and earnings impacts from foreign exchange in the October-December 2014 quarter."
Moeller said the company has seen a "small uptick" in US consumer spending, attributing the rise to lower unemployment, lower gasoline prices and a modest rise in wages.
Developing markets are "still very attractive," despite the strong dollar, he added.
Friday's results translated into organic earnings per share of $1.07, in line with analyst expectations.
Revenues were down 0.2 percent at $20.79 billion, slightly below the $20.83 billion expected by analysts.
Dow member P&G rose 1.7 percent to $84.60 in pre-market trade.
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